In response to the increasing amount of vacant space available in the Sacramento region, Davis developed a plan to attract new businesses to the area.
City Council passed a resolution to defer tenant improvement fees for new businesses.
In non-residential spaces, the city will defer all plan review and inspection fees, collected by the Building Division, for first-time tenant improvement.
This fee deferral is expected to boost business in Davis because space that is ready for move-in improves the likelihood that property owners will be able to lease their spaces quickly.
“Providing property owners in Davis an economic advantage over their competition, without the city incurring significant impact, would not only benefit property owners but the city as well,” said Mark Wood, Chief Building Official and one of the authors of the resolution.
The vacancy rate for office space in Davis is currently at an all-time high of 20 percent. The decision to defer tenant fees was sparked by a recent meeting between a local commercial developer and city staff.
According to the resolution, which was presented to the city council on Sept. 1, “In these difficult economic times the City of Davis may have an opportunity to distinguish itself from other communities within our area.“
Because plan review and permit fees for commercial office tenants are not a significant portion of the Building Division budget – amounting to less than $2,000 per application – deferring these fees would not cause the city to lose a great deal of money.
“We realized that in order to be competitive in the current market, Davis would need to look at barriers to locating or expanding in Davis,” said Davis City Manager Bill Emlen in a news release.
Fee deferrals such as this are not a new idea. Nearby cities such as Folsom, Elk Grove and Rancho Cordova have also recently offered similar incentives for businesses. Sacramento County has offered deferrals for roadway, sewer and transit fees for the last decade.
Nevertheless, city officials are optimistic that this action will give Davis a competitive edge in the market.
The incentive will remain in effect through July 1, 2011.
SARAH HANSEL can be reached at city@theaggie.org.
